The purpose of this research is to examine the development of children's social and moral understanding, and the connections between this social understanding, their close relationships with family members and with friends, and their self concepts in their early school years. The relations between children's early family experiences, and their social understanding, relationships with friends and family and self concepts during the kindergarten and first grade years will be examined in a sample of 50 children previously studied as preschoolers as part of the investigator's ongoing research (HD-23158-02). The children will be observed and interviewed at home with mothers, siblings and friends, at the start and towards the end of their kindergarten year and of their first grade year. Naturalistic observations will focus on the children's negotiations in disputes, their conversations about the social world, and their cooperation in pretend play. Their reasoning about transgressions, conceptions of conflict resolution, their understanding of others' emotions and of the relations of belief to action, their perceived self competence, and accounts of stress at school will be assessed in interviews and experimental procedures. Information on school experiences and adjustment will be obtained from teachers. Developments in understanding of sociomoral rules and in the nature of close friendship will be described; competing hypotheses about the processes influencing individual differences in social understanding and friendship relations will be examined.